Editorial: Bad deal keeps getting worse

Our view: The deal to buy private property at 11th and Park always looked like a government handout. Now it looks like even more of one.

The Chico City Council's decision to buy a blighted property on Park Avenue for an investment of $1 million an acre never made much sense. Fortunately, despite the council's best effort to toss away public money, the abolition of redevelopment agencies in California meant the sale was never completed.

But taxpayer money was still given away as a gift.

We learned last week that, through a city committee trying to make sense of the dissolution of RDAs, whatever happened to that highly scrutinized purchase of the property at 11th Street and Park Avenue, the old Taylor's Drive-In.

The City Council voted to purchase it three years ago using RDA money, which can be used to buy property that's considered blighted. The fenced-off parcel at 11th and Park certainly qualified. It was polluted and fenced off. Almost anything that could be done there would be considered civic beautification.

But the purchase price was stunning. Between the cost of the property, the cost of demolition of structures on the property, environmental cleanup and the price of relocating tenants of existing structures, it came out to $1.8 million for 1.8 acres.

The oddest part was that the property, owned by businessman David Halimi, was never placed on the market. Some local developers said they would have liked to have bid on the property as a redevelopment project, but the city with its deep pockets paid top dollar before anybody else had a chance to bid. The property never went on the market. If it had, we'd bet the price would have been a fraction of what the city paid.

Only one city councilor, Larry Wahl, voted against the purchase. Other councilors said it was a perfect use of RDA money. But that's one reason state legislators did away with RDAs — the tool was being abused.

The city paid $200,000 to clean up the underground storage tanks on the property, but the property never cleared escrow. It still belongs to Halimi.

"So we did a quarter-million dollars' worth of work for him for free," said Trevor Stewart of the RDA Oversight Board. Yep, that's pretty much it. City official Sherry Morgado said the state reimbursed the city, but it's still taxpayer money, regardless of which pot of money it comes from.

Now Halimi has a piece of property that's worth a little bit more. Certainly that's no fault of his. If the council was going to clean up his property for free, nobody would expect him to say no.

But the City Council needs to learn from this. We questioned what we considered to be a misuse of public money at the time, but the councilors would hear nothing of it. In hindsight, it looks like an even worse mistake than it did at the time.